Some details to note:
- The comparison is among California districts, all of which are operating in a similar state funding and policy context (and, as we know, most of education policy and funding in the U.S. is driven by states).
- These districts have similarly high-need populations, with many low-income students, and English language learners.
- Many are also urban districts.
- The comparison group includes comparably-sized cities such as Santa Ana and Sacramento.
- Oakland has the dubious distinction of rivaling Los Angeles Unified and Stockton Unified with nearly the highest central office spending per pupil.
- OUSD spent TWICE as much per pupil on central office as a district like Riverside, which has a similar student population and somewhat better outcomes on some measures, according to the new state dashboard.
- If OUSD reduced its central office spending to the comparison group average, it would produce almost $14 million in savings: enough to completely close the current year budget gap and then some.
The ERS report makes the specific reason for this higher-than-average central spending even clearer in this slide: OUSD has more people and higher cost per person in several central office areas.
Those of you who have seen District financial presentations might be surprised by this information. The District has reported that over the past few years they’ve been directing more money to sites and away from Central. Some of you might not be surprised; other than long-overdue and much-needed double-digit salary raises for teachers and other school staff, school sites probably have not felt this shift.
We believe the disconnect can be explained by looking at a different set of publicly available numbers. Specifically, we think that the “shift” to reduce central office expenditures over the last few years have been achieved mostly through accounting decisions, rather than substantive changes in budgetary control to move dollars closer to students. We’ve reached this conclusion by looking at the Fast Facts provided by OUSD over the past few years:
In 2013-2014, the District had about 37,000 students served by 1,911 teachers, 1,391 “Other School Staff”, and 940 Central Office Staff. Then…
Suddenly, in 2014-2015, Central Office Staff has about 300 fewer people and Other School Staff has that many more! Our conclusion: the District simply changed the budget categorization for some staff from central to “other site”. To be fair, this kind of change can theoretically help district staff feel more connected with and provide tailored service to school sites. We do know, from talking with school leaders, that sites didn’t receive a commensurate increase in budgetary authority. Principals could not say, “Instead of using these central services, we want to use those funds in a different way.”
 This is the fiscal year that ERS analyzed, and ERS used transaction-level information to categorize expenses in a way that would be consistent across the districts they studied.
In 2015-2016, there was not much change in the Central and Other School Staff numbers. So, despite the perceived and reported decrease in central office spending, it’s likely that OUSD continued spending significantly more centrally than similar districts.
The current year’s Fast Facts are bit surprising. Central Office Staff headcount increased by 13% or 88 employees, its highest level in three years. There’s not a corresponding decrease in Other School Staff. Did the Central Office really grow that much?
OUSD has been spending too much centrally and not enough at school sites. We hope the District has been making substantive (rather than accounting) changes in this area since the ERS report came out last year, and we would love to hear more from District staff on this.
It’s also probably not surprising that we’re having a budget shortfall if enrollment – which drives revenue – has been essentially flat and yet every year we’ve been adding more staff of all types.
Next week we are going to delve into variances in spending across school sites, exploring the equity question: is more money going to the students and schools who most need extra resources? What’s your prediction?
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